Magazine: 2001

Landmark Legal Foundation’s five-year investigation of the National Education Association, and subsequent legal action, is a powerful reminder of the value of persistence and hard-work. It is also an impressive example of how conservative activists can pro-actively and effectively counter established, entrenched, and well-funded opposition.

Introduction

In the 12 years that the Landmark Legal Foundation has championed the right of low-income and minority students to receive a quality education in Wisconsin, Pennsylvania and elsewhere, the NEA has been the most vigorous opponent to meaningful education reform. It is also no surprise that the NEA is one of the most powerful and effective forces in American politics. Yet, until Landmark launched its Quality Schools initiatives, virtually nothing was known about the manner in which the NEA flexed its political muscle. That is why Landmark spent several years and significant resources gathering and analyzing an enormous body of previously undisclosed evidence about the NEA’s operations.

Landmark’s July 20, 2001, Complaint Against the NEA

In July, 2001, Landmark filed a comprehensive complaint with the IRS demonstrating how the NEA coordinated campaign activities and political spending with the DNC, the 1996 Clinton-Gore campaign and other political organizations – all in flagrant violation of federal tax law. Landmark’s complaint includes compelling information from Federal Election Commission (FEC) documents that shed an entirely new light on the NEA’s political activities.

The FEC evidence establishes that the NEA does not merely spend millions supporting candidates for public office, but the union sets the national Democratic Party’s campaign policy as a member of a “Coordinated Campaign Steering Committee.” The evidence also describes in detail how the NEA, its state and local affiliates, and state Democratic committees work with the Coordinated Campaign Steering Committee to develop and implement campaign strategies and spending priorities.

This evidence is important because it demonstrates that the NEA is using tax-exempt general revenues, in coordination with other political organizations, to influence local, state and federal elections without reporting any of these activities to the IRS, and without paying the required corporate income taxe

DURING THE RECENT DEBATE in our nation’s capital over how best to get the U.S. economy moving, two opposing camps coalesced.

The first, and larger, camp emphasized more government spending, accompanied by tax rebates and temporary tax cuts geared primarily at low-income earners. These were the Keynesians, and their emphasis was on consumption. The second camp emphasized the need for permanent tax relief that boosts incentives for working, investing and risk taking, and helps the economy in both the short run and over the long haul. These were the supply-siders, and their emphasis was on production, subject to the free market.

Economist John Maynard Keynes once declared: “Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.” Unfortunately, the defunct economist that continues to enslave many economists, academics, policymakers, elected officials, the media, and Wall Street today is Keynes himself.

While Keynesian economics has long proven a complete failure, with its mistaken emphasis on government fine tuning of the economy (or more specifically, aggregate demand), such thinking continues to hold considerable sway.

The government-centered Keynesian view of the economy certainly has had substantive critics over the years. However, perhaps no other school of economics so audaciously contradicted establishment Keynesian thought and policy as has supply-side economics.

Supply-side economics has been attacked and caricatured by its opponents over the years. In actuality, though, supply-side merely brings the economics discipline back to its microeconomic roots. While Keynesian economics largely concerns itself with government attempts at fine tuning demand and the economy, supply-side emphasizes individual economic decision-making and how government policies impact those decisions.

● Markets work. The free, unfettered market provides clear incentives – through price and profit signals – that assure that resources are allocated to their most efficient and beneficial uses. So while supply-side economics emphasizes production (see next bullet), it is production within the context of the free market. In order to be of value, production must meet or create a demand. After all, the end point of the entire economic process is consumption.

● Supply comes before demand in the economic process. There are two aspects to the idea that supply takes precedence over demand in the economic hierarchy. First, in the marketplace, one must supply a marketable good or service before one can legitimately demand or consume. That is, as the 19th-century supply-side economist Jean-Baptiste Say noted, “products are always bought ultimately with products.” One must supply something in order to be able to exchange to meet one’s own needs and desires. Or more plainly, you can’t get something for nothing.

Second, supply creates demand. Indeed, no general demand existed for televisions, home computers, or most other products or services, until someone invented and improved upon such products and services.

● The engines of economic growth – working, saving, investing, risk taking, innovating, inventing, and creating– are all supply-side endeavors. Economic growth can only occur through a boost in resources used for production purposes and/or greater efficiencies, innovations, and inventions.

● The entrepreneur – not the government – drives the economy. Supply-side economics recognizes the critical economic role played by the entrepreneur. As the source of new products, services, inventions, and innovations, the entrepreneur serves as the ultimate source of economic growth.

● A healthy economy depends upon sound money. Price instability and inflation are monetary phenomena that increase the risks and costs of saving, investing, and risk taking. Sound money – knowing that a unit of currency will maintain its value months, years, and decades from now – is the necessary foundation upon which an economy can prosper.

Supply-Side Policies

Once one understands the foundation upon which supply-side economics rests, then supply-side economic policies become quite apparent.

Supply-side policy is driven by two “policy levers.” The first is the fiscal lever – tax, regulatory, and spending policies geared toward establishing a pro-growth economic environment. The second is the monetary lever – monetary policy geared to establish price stability upon which an economy can function and flourish. Under the supply-side economics model, economic growth and price stability are not at odds with one another, but are actually complimentary. After all, the most accurate definition of inflation remains “too much money chasing too few goods.” Therefore, economic growth, or the production of more goods and services, is anti-inflationary.

As for the fiscal policy lever, the following policy prescriptions are deeply rooted in supply-side economic thinking:

In addition, supply-side recognition that supply comes before demand in the economic order leads to a preference for taxing consumption rather than production. This also makes sense, as consumption is the eventual end point of all economic activity and serves as the most logical point in the economic process to reflect the total cost of government. Of course, as is the case with all taxes, taxing consumption too heavily most assuredly cripples an economy.

● A light regulatory burden. Regulation is simply another form of taxation – though largely hidden from consumers’ eyes. Regulations raise the costs of investment and entrepreneurship, and thereby restrain economic growth and job creation.

● Small, limited government. Under supply-side economics, the primary emphasis is on the total size of government. That is, what are the total resources being diverted from more productive private-sector ventures to less productive government endeavors, whether through borrowing or taxing.

After all, government operates under an abysmal set of incentives. Without the disciplines of prices, profits, losses, and private ownership, government is inherently wasteful, and, therefore, should be quite limited in its duties.

On the secondary level, the relative mix of how government is then financed gains supply-side attention. For example, the relative economic costs of borrowing versus taxing must be considered. Of course, in the long run, most government expenditures are eventually paid for with taxes and fees (or through inflation). However, the mix, timing, levels, and types of taxation help determine the size and growth of the economy.

As for the monetary policy lever, the only objective of monetary policy should be price stability. A sound currency and stable prices create an environment where investment and the economy can flourish.

Anchoring the dollar to gold – as was the case, to varying degrees, from the end of the 1870s to the late 1960s – still serves as the surest path to price stability.

Some supply-siders call for a gold price rule, where the Federal Reserve targets a certain gold price range, and varies monetary policy accordingly (e.g., price of gold goes above the targeted range, then tighten policy; if the price drifts below the target, then loosen monetary policy). A few others call for a return to a classical gold standard. Either way, the point is to establish a market-based discipline by which to guide monetary policy. Without such discipline, government runs monetary policy according to the whims and often-dubious economic theories of central bankers.

The Supply-Side Record

The record of supply-side economics has come under considerable assault in recent years, particularly as it relates to supply-side policies in the 1980s. Such attacks have been largely motivated by politics and by those favoring continued government micromanagement of the economy. An honest assessment of the results scores quite favorably in supply-side’s favor.

For example, the prominent periods of supply-side tax policies during the twentieth century – 1900 to 1912, 1922 to 1929, 1964 to 1968, and 1983 to 1989 – all show above average rates of economic growth. In addition, economic growth received a big boost in the late 1990s in part due to the 1997 capital gains tax cut, which reduced the tax costs related to investing and entrepreneurship.

Growth during the 1980s also benefited from a decline in the overall federal regulatory burden. According to economist Thomas Hopkins of the Rochester Institute of Technology, the real federal regulatory burden was on a steady decline from the late 1970s through 1988.

As for the size of government, economist Richard Rahn has performed in-depth, informative analyses of the size of government and its effect on economic growth over the years. In 1986, while at the U.S. Chamber of Commerce, Rahn and a group of economists examined the relationship between the total size of government and economic growth in 22 nations. They estimated that government maximized economic growth when it claimed between 15 percent and 25 percent of GDP. Today, government in the United States gobbles up more than 30 percent of GDP.

A more recent study by Rahn and Harrison W. Fox, Jr. (“What is the Optimum Size of Government?” sponsored by the Business Leadership Council and the Vernon K. Krieble Foundation) examined the relationship between economic growth and the size of central governments for the period of 1951 to 1993 for 57 nations. They concluded that growth is maximized when the central government’s share of GDP registered between 10 percent and 15 percent. The U.S. federal government revenues currently capture more than 20 percent of GDP.

As for trade, one of the most costly anti-supply-side measures taken within the past century was the Smoot-Hawley Tariff Act of 1930. As Smoot-Hawley crawled through Congress, it played a major part in the stock market crash of late 1929. Its passage set off a trade war, collapsing international markets, and igniting the Great Depression. In contrast, post-World War II efforts at reducing barriers to trade have been fairly successful, and contributed to both U.S. and global economic growth.

On the monetary policy front, once the final remnants of the dollar’s link to gold disintegrated in the late 1960s (with the gold window officially being closed in 1971), inflation and inflation expectations have loomed as real threats ever since, though to varying degrees. Of course, inflation expectations reflect themselves in interest rates.

Interest rates remained quite low while the dollar was somehow linked to gold until the late 1960s. Once the gold-dollar link was abandoned, they subsequently skyrocketed, and generally have hovered above the levels that were maintained while the dollar was linked to gold.

A Supply-Side Economics Reading List

• An Inquiry into the Nature and Causes of the Wealth of Nations (1776) by Adam Smith
• A Treatise on Political Economy (1803) by Jean-Baptiste Say
• Taxation: The People’s Business (1924) by Andrew Mellon
• The Way the World Works (1978) by Jude Wanniski
• Wealth and Poverty (1981) by George Gilder
• The Economy in Mind (1982) by Warren Brookes
• The Supply-Side Revolution (1984) by Paul Craig Roberts
• The Growth Experiment (1990) by Lawrence Lindsey
• The Seven Fat Years (1992) by Robert Bartley
• Money Meltdown (1994) by Judy Shelton

A Supply-Side Agenda for the 21st Century

After reviewing basic ideas, policies, and results, the supply-side economics agenda for the coming century is clear:

● In the short run, vastly accelerate the implementation of the President’s across-the-board reductions in income tax rates – preferably also deepening those rate cuts – and immediately eliminate two specific taxes that diminish investing, risk-taking, and entrepreneurship: the capital gains tax and the death tax.

● Eventually replace our current messy, counter-productive tax system with a low-rate, simple, consumption-based tax. Either a low flat tax or a low-rate national retail sales tax makes sense.

● A massive deregulation effort must be undertaken. This means not only rolling back current onerous regulations, but also establishing a system that helps to prevent the imposition and continuation of wrongheaded and costly regulations.

● Dramatic reductions in the size of government – federal, state, and local – must occur. Privatization, competitive contracting, and cutbacks in and elimination of wasteful programs must be implemented in order to cut government spending and free up resources for more productive private-sector uses. Shifting Social Security, for example, to a system of privately owned and controlled investment accounts would boost individual returns and free up resources for pro-growth, private-sector investments.

● Efforts to tear down trade barriers both at home and in other nations must be stepped up.

● Re-linking the dollar to gold would reduce inflation and inflation expectations, cut interest rates dramatically, and as other nations returned to gold, exchange rates would stabilize, reducing risks of international investment and trade.Despite relentless attacks by opponents, supply-side economics not only makes economic sense, but it works. The supply-side emphasis on incentives, free markets, economic growth, the entrepreneur, and sound money claims a long, honored and successful history.

Mr. Keating serves as chief economist for the Small Business Survival Committee (SBSC), a columnist with Newsday, and co-author of U.S. by the Numbers: Figuring What’s Left, Right, and Wrong with America State by State (Capitol Books, 2000). This article is excerpted from “Understanding Supply-Side Economics: The Principles, the Policies, and the Future,” published by the Small Business Survival Committee in May 2001.

ON SEPTEMBER 11, America suffered a deliberate and coordinated attack on its soil. Despite numerous warnings that terrorists could attack the U.S. homeland and significant increases in counterterrorism spending during the last Administration, the hijacking and commandeering of U.S. civilian planes into the Pentagon and the World Trade Center exposed a vulnerability that few Americans expected even though terrorists already had hit U.S. embassies in Kenya and Tanzania, the USS Cole, military installations in Saudi Arabia, and the World Trade Center.

No longer can policymakers ignore the fact that America is under attack. Nor can they ignore the recommendations of various studies and congressionally appointed commissions about deficiencies in the U.S. armed forces, America’s vulnerability in space, and the growing threat of ballistic missiles and biological attack.

Elements of a New Agenda

It is fortunate that President George W. Bush and Secretary of Defense Donald Rumsfeld already had begun taking steps to modernize and transform the U.S. armed forces into a 21st century fighting force – one that could appropriately address both conventional threats and unconventional threats like terrorism. The events of September 11 confirmed the appropriateness of this course. Clearly, the new U.S. defense and security agenda must include:

Accelerating development and deployment of ballistic missile defenses. The September 11 attacks underscore the realization that terrorists and terrorist states are not easily deterred. Aggravating the threat is the fact that the key states involved in terrorism are also developing long-range ballistic missiles. Terrorists who seek to inflict massive loss of life and property in the United States may have no qualms about launching a missile carrying nuclear, chemical, or biological weapons.

To protect Americans against such devastation, ballistic missile defenses must be deployed as soon as possible. To do this, however, the United States must announce that it considers the 1972 Anti-Ballistic Missile (ABM) Treaty with the Soviet Union defunct. It must also streamline the missile defense development and acquisition process, fully fund the President’s missile defense program, and begin developing specific architectures for near-term deployment.

Activating an immediate and coordinated homeland defense program. The events of September 11 show that the U.S. homeland faces imminent threats from non-conventional terrorism and attacks against critical infrastructure. The first systems put in place should be those that detect and defend Americans from biological agents released by any means. A program also must be launched to produce – as rapidly as possible – adequate stocks of antidotes and vaccines for the most likely biological agents.

In addition, a central authority should be established to coordinate the White House effort to defend U.S. territory from attack. Its primary job should be to organize the federal agencies to deal with the homeland threat and to establish clear operational lines for the use of the military in homeland defense. No Department of Defense resources should be spent on missions better handled by others.

Increasing deterrence of near-term aggression. Though deterrence will never be 100 percent reliable, maintaining the ability to fight and win wars in diversified situations and environments can discourage many of America’s enemies from hostile acts. If deterrence fails, as it did on September 11, and war ensues, America’s armed forces must be strong and ready to respond.

To this end, the United States military should expand the most flexible elements of its forces. This should include increasing the attack submarine fleet and reopening the B-2 bomber production line; it also means continuing the broad-based modernization of the fighter fleet and maintaining the current level of aircraft carriers.

Strengthening America’s space assets and space presence. In future conflicts, space control or even space dominance may prove decisive. Nations that learn to utilize the full benefits of this strategic high ground for civil and military purposes will be dominant powers in this century.

For the United States, this will mean defending America’s satellite system by making it more survivable and by deploying anti-satellite (ASAT) capabilities. ASAT capabilities will be necessary to control space in times of conflict if adversaries use satellites to conduct operations. To ensure the survivability of America’s space-based systems, the United States should deploy distributed military satellite networks – smaller and widely dispersed satellites with duplicative functions. The government also will need to develop a military space plane that is able to replace damaged or old satellites and possibly conduct military operations.

Transforming the forces for quick-reaction global operations. A longer-term goal of transformation (say, for example, 10 years) should be to create a military force capable of conducting worldwide operations to attack and destroy widely distributed targets rapidly. This force should include advanced cruise missiles, unmanned combat aircraft, “space bombers,” new submarines, low-visibility surface ships, directed energy weapons such as lasers and microwaves, and space control assets.

Most of these systems require far fewer soldiers to operate than do current systems. Further, such revolutionary capabilities would maximize the advantages of robotics, miniaturization, and automation. Central to such a military revolution would be networks of land, air, sea, and space sensors that collect targeting data and other information with which to monitor enemy activities in real time, or the presence of chemical, nuclear, or biological contaminants. In addition, they would be used for developing navigation tactics for all forces.

Human intelligence would support technological means, allowing forces to sustain a rapid pace of operations with little logistical support. Development of this type of force would require significant investments in space-based reconnaissance, surveillance, and communications, as well as innovative and flexible logistical options, secure command-and-control networks, and expanded basing options.

Diversifying force projection. Aircraft carriers and the U.S. Marine Corps will remain fundamental to America’s ability to project power, but U.S. military forces should seek to diversify their power projection capabilities. The Navy should develop a more stealthy missile-intensive platform, such as the arsenal ship or a missile submarine, to augment the current fleet. This platform should be able to operate independently, thus avoiding many of the threats that surface ships face and requiring far less support. The Pentagon should move forward with a plan to convert no more than four of its ballistic missile submarines to cruise missile platforms.

The U.S. Air Force should diversify its air-to-ground strike options. It should procure enough tactical aircraft over the next 10 years to ensure a modern force, similar in size to today’s force, to meet near-term threats. It should minimize the long-term procurement of aircraft that only marginally improve current capabilities and instead invest in a reliable unmanned combat aerial vehicle (UCAV). Additionally, it must modernize its bomber force and develop a new long-range air-launched cruise missile.

Restoring the combat focus of deployments and modernization. On balance, peacekeeping and other long-term non-combat missions detract from warfighting readiness. The reason: When troops are participating in non-combat missions, they are not training for combat. As the September 11 attack demonstrated, the U.S. military must always be at a high state of readiness because no one can predict when the armed forces will be called upon to defend the nation.

Furthermore, the United States may still have to fight major wars in Iraq, Korea, or some other region where large, heavy land forces will be needed. A warfighting-ready Army is America’s insurance policy against near-term failure in force transformation. This is not to imply that the Army should remain technologically stagnant. Instead, every Defense program should enhance the ability of the U.S. military to fight and win wars.

Over the past decade, however, U.S. resources have been drained by non-combat missions. Moreover, equipment used in these missions was built for engaging the Soviet Union, not for peacekeeping. This discrepancy in purpose translates into deficiencies in application. Now the deficiencies of America’s warfighting forces in its non-combat missions are helping to define the requirements for the Army’s modernization. Instead of reflecting the changing security environment, current modernization efforts tend to reflect America’s past commitment to non-combat operations. Continuing along these paths is folly because deterring aggression will require a strong combat capability, not an ability to conduct non-combat operations.

Eliminating waste by closing excess military bases and irrelevant weapons systems programs. Currently, the Pentagon maintains a 20 percent to 25 percent excess base capacity. Significant savings could be generated by eliminating this excess; the cumulative savings from the four previous rounds of base closures is around $16 billion. Additionally, the United States needs to begin looking for new basing arrangements overseas, as well as new modes of military basing. The coming conflict in Afghanistan demonstrates the need for new basing arrangements in potential conflict areas.

The Pentagon must reduce or halt the production of some of its major weapons that draw important funds away from other priorities. For example, the B-1B bomber program should be reduced in the short term and replaced with a more modern bomber program as soon as possible. Development programs that should be halted include the Army’s Crusader and the Navy’s DD-21 systems. Although each of these can make positive contributions to defense, their costs are too high in terms of what they take away from the transformation effort. It is essential that the Pentagon begin its transformation now, and making a clean break from these systems will make that process easier.

Reducing the “tooth-to-tail” ratio of U.S. forces to free resources and streamline military operations for greater efficiencies. On the personnel side, for example, the staffs of many higher-ranking military officials could be reduced substantially. Likewise, numerous opportunities exist to eliminate duplicative services within the Defense Department.

Operationally, the immediate focus should be on acquiring new technology that allows certain weapons to operate with less support. The development of hybrid engines and fuel cells, for example, would mean that fewer fuel vehicles would be needed to support field operations. Additionally, sensors and networked information systems would allow smaller numbers of people to cover larger swaths of territory.

Conclusion

President Bush is clear that part of America’s response to the devastating September 11 attacks on the United States will be a sustained military effort to eradicate the terrorist networks and the state sponsors behind them. This effort will require a significant military investment. Although such a campaign may change some near-term priorities, it also will underscore the importance of implementing a long-term force modernization and transformation strategy.

Mr. Spencer is Policy Analyst for Defense and National Security in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation. This article was first published as Heritage Backgrounder 1476.

WHAT WOULD A CONSERVATIVE LIBRARY look like? We asked over 50 conservative thinkers, writers, and leaders which books they would recommend for our summer reading list. Each of them was invited to name two books that most shaped their own conservative outlook. The result was a list of 30 books, with surprisingly little overlap. Below we have compiled a “top five” list from those recommendations, with some of the comments we received about them. After that, in alphabetical order, we have listed the remaining 25 nominees.

This list is by no means exhaustive. In fact, we would like to add to it. If you have a favorite conservative classic which you think should be added to the list, email us at Insider@heritage.org. We will post nominations, along with those already listed here, on the Heritage Foundation web site at http://www.heritage.org/forcoalitions. Happy reading!

1. The Conservative Mind: From Burke to Eliot by Russell Kirk

“With the publication of The Conservative Mind in 1953, the post-World War II revival in conservative thought became self-conscious and overt. This is the founding book of our movement, wherein Russell Kirk demonstrates how modern conservatism was shaped by a procession of towering intellects from Edmund Burke to T. S. Eliot.” – T. Kenneth Cribb, Jr., Intercollegiate Studies Institute

2. The Road to Serfdom by Friedrich A. Hayek

“One of the first books a new member of Young Americans for Freedom was urged to read in the late 1960s was this classic by Nobel laureate and Austrian economist F. A. Hayek. For me, it clarified the danger of being seduced by socialism’s velvet glove and explained in vivid terms why that glove invariably conceals an iron fist.” – Lawrence W. Reed, Mackinac Center for Public Policy

3. Witness by Whittaker Chambers

“The American political left spent the Cold War telling us there was no Cold War, that socialism and freedom were somehow morally equivalent. In Witness, Whittaker Chambers shatters that mythology with a first-hand account of life as a Communist spy. The lessons in this book are timeless. It is essential reading for any young conservative, particularly at a time when the revisionists are mad at work attempting to rewrite recent history, still denying the very real threat that Soviet communism, in all its wretchedness, posed to the world.” – Brent L. Bozell, III, Media Research Center

4. Economics in One Lesson by Henry Hazlitt

“I discovered this important little book in college. While it was not part of my economics curriculum, nor did its views correspond with those of my professors, it gave credence to my own views which on campus were seen as unpopular and even radical. It has served as a guiding light not only throughout college but throughout my career.” – Sally C. Pipes, Pacific Research Institute

5. Ideas Have Consequences by Richard M. Weaver

“Ideas Have Consequences, like Weaver’s other books, is small but deep. It brilliantly diagnoses what ails modern man, tracing the illness to its root, the flight from faith.” – Morton Blackwell, The Leadership Institute

Other Recommendations

Wealth and Poverty by George Gilder;

The Abolition of Man by C. S. Lewis;

Atlas Shrugged by Ayn Rand;

Basic Economics: A Citizen’s Guide to the Economy by Thomas Sowell;

The Bible;

Burke’s Politics: Selected Writings and Speeches of Edmund Burke on Reform, Revolution, and War edited by J. S. Hoffman and Paul Levack;

Capitalism and Freedom by Milton Friedman;

The Conscience of a Conservative by Barry Goldwater;

Democracy in America by Alexis de Tocqueville;

The Federalist Papers by James Madison, Alexander Hamilton and John Jay;

THE MODERN AMERICAN UNIVERSITY is the product of confidence: confidence in its concrete utility, and confidence in its service to freedom and democracy. Concrete utility has mainly been the product of the university’s scientific/technological establishments, and the research and training facilities they embody. Freedom and democracy have been the province of its humanities and social science curricula, presumably designed to broaden the mind, strengthen the reason, and inculcate the essential norms of republican self-government.

During most of the twentieth century this confidence was largely warranted. The question at the dawn of the twentieth-first is whether this is still the case. It’s a question that first must be answered by the academy’s permanent inhabitants: the scientists, scholars, and administrators responsible for its daily operation. But, ultimately, it must also be answered by the citizenry at large, because the nation’s fate depends on the conclusion.

Unfortunately, few of influence within higher education today are interested in an honest assessment. Too many careers have become dependent on the support of the university’s least serviceable sectors. Indeed, pandering to them is what most often passes for progressive academic leadership.

Even more disturbing is the general unconcern of the leaders outside of the academy. While accepting the idea of academic freedom, they’ve lost sight of two other equally important truths: first, that the doings of scholars can, if sufficiently wrongheaded, seriously endanger America’s prosperity, freedom, and safety; and second, that the laity has an obligation to act prudently to prevent these injuries.

One would expect such an understanding to prompt serious interest in the principles and practices through which the academy functions, particularly by those who as trustees, legislators, alumni, and donors are vested with powers of academic oversight and influence. The life of the mind promotes the welfare of society when it produces genuine knowledge and clear habits of thought. And these outcomes depend on its being governed by reason, evidence, intellectual civility, due modesty and, with respect to the proper study of mankind, measured judgment. Such governance further requires an academic constitution sufficient to its task. When unreason, disdain for evidence, incivility, arrogance, and poor judgment flourish within significant quarters of academic life, an appraisal of the adequacy of its constitutional practices is in order. Given the reaction of America’s opinion leadership to the extravagances of academic political correctness, it is astonishing that such a reexamination has not been undertaken.

One reason for the relaxation of academic quality controls is in part the outcome of higher education’s democratization, made possible by open-door admission policies that became widespread during the twentieth century’s second half. The equality of opportunity these afforded, coming closer than anything before to creating true meritocracy, has been unparalleled. But it also has had the paradoxical effect of weakening the performance standards on which meritocracy is based. Thresholds have also been lowered for the proportional representation of major demographic groups.

The public’s support for broad-access is exceptionally intense. Aware of this, public leaders have been unwilling to dwell on the intellectual compromises the policy demands. Neither, of course, have most university presidents, for whom growing enrollments are the financial bottom line.

The price paid for broad-access admission policies goes beyond their diluting effect on undergraduate curricula and courses. High school teaching at the college-level breeds cynicism. When an institution’s inhabitants believe it has drifted too far from its authentic calling, their willingness to resist further assaults on mission slackens. A sense pervades that what was once a profession has become merely a living, without principles worth bothering to defend.

The bigger threat to the intellectual health of the academy, however, has been internal. A number of academic fields, centered in the humanities and the social sciences, have fallen under the influence of a variety of ideological sects. Classically utopian, their fuzzy vision of a perfect future is often supplemented by a perfect hatred of the manners and mores of existing society. Divided in what they believe, they are generally united in what they oppose, including much of the legacy of civilization, typically seen as an oppressive, elitist, and outworn encumbrance. Similarly regarded are the maxims of pluralism, freedom and tolerance. The banner of “diversity” under which they march is meant to supplant, not strengthen, authentic pluralism, artfully substituting differences of color, ethnicity, and sex, for those of belief.

The preaching of these campus sectarians is a far cry from liberal education’s original conception. Instead of preparing for free citizenship, or the reflective life, it undermines rationality, narrows perspective, and obstructs the acquisition of the knowledge and judgment necessary to both. Although the sectarians are a minority of the total faculty, their strength of conviction frequently allows them to dominate their quieter, more moderate colleagues. Worse yet, because they fight so hard to hire their own and multiply their numbers, such resistance as exists is in serious danger of dwindling with the passage of time. Not satisfied with dominating their respective fields, they also seek to appropriate as many other aspects of institutional function as they can, reaching out to remold university admissions, student life, interpersonal relations, and other dimensions of campus existence to their ideological liking. Over the last several decades their successes have been immense.

Something was clearly missed by the architects of the modern American university. Men like Harvard president Charles W. Elliot, Johns Hopkins president Daniel Coit Gilman, and intellectual leaders of the professorate like American Association of University Professors founders John Dewey and Arthur O. Lovejoy assumed that in the dawning new age of science academics across the disciplines would comport themselves more or less in accord with science’s methods and strictures. Hardly simpletons, they understood the differences in practice and aspiration that inquiry into subject matters as disparate as those of physics, history, sociology, and literature entailed. Yet they also believed that a “science-like,” if not wholly scientific, insistence on methodical research, reasonable dispassion, careful verification, professional civility, and general open-mindedness, could build communities of teachers and researchers outside the natural sciences, capable of advancing knowledge in a spirit similar to those within.

In retrospect, the mistake of the modern academy’s founding fathers stands clear. It was simply wishful thinking to believe that the internal checks that suffice to keep the natural sciences on the intellectual straight and narrow could operate effectively in the humanities and would-be social sciences. No reform can succeed unless this “constitutional fact” is admitted.

In fields like physics, chemistry, and biology, the classic paradigm of scientific investigation is fully realized. The natural sciences have organized themselves into a powerful system for generating, testing, discarding, verifying, accumulating, and integrating propositions about the world.

By contrast, in the humanities and social sciences continued laissez-faire is unlikely to get things right. The very humanness of their disciplines is at the root of the problem. They wrestle with questions too entangled in the world’s strife – and too inherently complex – to accumulate reliable knowledge and avoid intellectual debasement in the manner of the natural sciences. Causes more than curiosity recruit their acolytes, rivalries too easily slip into enmities, disagreements superheat over value conflicts, and before disputes can get into substance they’re apt to spin off into fierce quarrels over rival modes of verification.

As might be expected in such conflicts, it is the passionate intensity of the worst practitioners that commonly prevails. As a result, the simple modes of majority-rule academic decision-making, entirely serviceable in the sphere of hard science, often lead in the humanities and social sciences to the exclusion of the most reasonable perspectives through ideologically motivated hiring, tenure, promotion, publication and curriculum decisions. To keep these domains as intellectually balanced and fruitful as possible, a systematic rethinking of their governance procedures must commence.

Recognizing this is not an act of disparagement. The humanities and social sciences address core issues about the human condition that demand deeply considered answers. Nor is it a suggestion that the university’s internal affairs be micromanaged from outside – individual academic decisions should be left to academics, whatever their field. The issue, rather, is the structure of the system within which such decisions are made. And here the external world, and its representatives at the peak levels of university governance, may have some practical wisdom to bestow on the academy’s denizens.

The constitutions of free republics contain a variety of proven devices for preserving due process, limiting overweening majorities, and tempering decision-making in ways potentially applicable to the more fractious precincts of academe. Some are “judicial” in nature, relying on refereed rule-maintenance in decision making, others involve voting systems crafted to protect minority viewpoints, others organize competing power-centers to check the abuses of concentrated authority, and still others structure public debate so that opposing positions get a fair chance to be heard. Such mechanisms, poorly delineated in current academic practice, might greatly benefit fields occupying the “bloody crossroads” of science and politics if made part of their procedures of governance.

The goal, of course, would not be to turn the governance of the humanities and social sciences into a replica of democratic politics – searching for truth and splitting the difference aren’t the same vocation. Rather, it would be to inhibit the formation of oppressive intellectual monopolies based on zeal and organizational power, and direct the resolution of academic disputes toward a more productive resort to civility, evidence, and logic.

Discovering these constitutional solutions is likely to require extended trial and error, taking different paths in different fields and institutions. (I’ve provided some specific conjectures about the forms these might assume in an essay included in Building a Healthy Culture; Strategies for an American Renaissance, recently published by William B. Eerdmans.) Needless to say, new information technologies, by dissolving established academic structures, could also tremendously accelerate this process. But because it will inevitably be resisted by passionate ideological interests deeply rooted in the academy’s soil, the process will only succeed if reformers inside the university find stalwart and understanding allies without.

But will they? Will men and women in public life see the necessity of applying the lessons of “real-world” conflict management to the task of constitutional reform within our universities? And will they then take the time and trouble to work with cooperative academics to make such reform real? It is often difficult for people of affairs to see how what might easily pass for a vapid realm of talk can profoundly effect things they hold dear. But as economist John Maynard Keynes famously observed “practical men who believe themselves exempt from any intellectual influences are usually the slaves of some defunct economist. Madmen in authority who hear voices in the air are distilling their frenzy from some academic scribblers of a few years back.” The twentieth century saw more than its share of madmen in authority. One can only hope that today’s “practical men” will recognize the need to prevent America’s universities from becoming nurseries for the lunatics of the twenty-first.

DOES THE NAME WINIFRED SKINNER sound familiar? If the name doesn’t, how about the pictures we saw on the nightly news during the 2000 presidential campaign of the grandmother in Illinois who had to go around picking up aluminum cans each day so she would have enough money to pay for her monthly prescription drugs? Remember her?

Politicians, in this case Al Gore, have a knack for finding “real people” to convey the personal side of complicated issues. And often times, as in the case of Ms. Skinner, they don’t let the facts surrounding the issue get in the way of a good story, or should we say, good picture. A few days after Mr. Gore introduced Ms. Skinner as the face of our nation’s elderly who can’t pay their prescription drug bills, we learned Ms. Skinner’s son had been more than willing to financially assist his mother, but she actually enjoyed her morning routine of can collecting. Of course, that revelation came after several days and tear-jerking network news reports later. The picture had been painted and Mr. Gore’s message had been delivered.

Personalizing your message is one of many effective techniques to help you engage, inform and motivate your audience. There are really three basic steps to creating an effective message. First, you must target your message. That means deciding who is your audience. Second, and only after you have defined your audience, you must develop your key message points, what are sometimes referred to as “talking points” or “soundbites.” Third, you must effectively deliver your message. This means using the right tone, wearing the right clothes and making sure you smile when possible. These steps may sound simple, and they are, but unfortunately, too many of us skip number one, never truly fine-tune number two and believe it’s superficial to pay much attention to number three.

Targeting Your Message

The first question you should always ask yourself, “Who is my audience?” Is it male or female? Is it religious or secular? Is it parents of school age children or single young professionals? Are you trying to fire up your base or persuade the undecided? The list could go on and on. When you’re satisfied you’ve found your target, move to step two.

Developing Your Message

First, understand you won’t be able to say everything you’ve ever wanted to say about your issue. You must limit yourself to two or three main points to be repeated throughout your speech or interview. Take what I call the “Obit Test.” What is the main point you want your audience to remember after you’re gone? When your audience member turns off the TV or radio show you were just on or throws away the newspaper article that contained your quote, what is it you want them to remember about what you said? What is the message you want them to be able to repeat to their spouse or neighbor? That is your main message. Repeat this exercise and you get message points two and three.

There are two more tests your message must pass. One, does it connect with your audience, and two, can you state it in less than 30 seconds. In order to connect with your audience, you must use language familiar to them and examples that “are” them. When President Bush was trying to sell his tax cut to the public, he frequently talked about (and had standing behind him) “a family of four making $50,000 who would get $1825 in a tax cut.” The president’s advisors knew if this tax cut was going to gain momentum with the public, the public had to see how it would affect them. When politicians and advocates use big numbers and make high brow philosophical arguments, the public often has a hard time seeing how any of it personally impacts their lives. If you can show them through examples and picturesque language what they will either gain or lose, you have a much better chance of connecting with them, and therefore persuading them.

Why do you have to be able to make your point in less than 30 seconds? If you’re in a debate, it’s rare the other side will let you go much longer before interrupting. There is also something called editing. If you’re being interviewed by a reporter for a two-minute story on that night’s newscast, you should not assume you will be given all two minutes of air-time. Chances are they’ll be interviewing other people to include in their story as well. So, if you talk for one minute solid, the reporter is going to have to pick the 30 seconds of your one-minute statement, the soundbite, to include in his report. Why let the reporter make that choice? It’s always better to edit yourself. Speak, as best you can, in 30-second soundbites.

Delivering Your Message

Americans watch a lot of television, with some studies reporting over 36 hours per person per week. We also know the average viewer changes channels over 100 times per hour. Why are these statistics important? Because they point to the ever-shrinking attention span of the viewer and illustrate how difficult it is to catch and keep their attention. You have about :08 seconds to make your first impression. In that very short time, your audience will come to several conclusions about you. They will decide if they believe you to be credible, if what you have to say affects them, if you are someone who represents their interests, if you are engaging and, last but certainly not least, if they like you. Your voice, your gestures and your appearance are all critical elements in their thought process.

Your tone of voice and rate of speech convey your emotions. If you’re tone is loud, you will likely come across as angry. If you’re speaking quickly, you’re exuding excitement and a sense of urgency. If you’re tone is soft, you come across as compassionate. If you’re speaking at a slow pace, you’re calm and understanding. Make sure you are using the tone of voice that accurately communicates the emotion you want to convey. There is much about the media you can’t control. You can’t control what questions will be asked, the bias of the reporter, or what a caller might say on a radio program, but you can control your tone of voice.

If you remember only one item from the points being made here, remember this one, SMILE. Nothing will improve your performance more than incorporating a smile in your delivery. No, this doesn’t mean you have to grin from ear to ear throughout an interview, but it does mean the more you can do so, the better your performance will be. Have you ever noticed when someone smiles at you, you tend to smile back? Have you ever thought about the fact you can “hear” a smile over the radio? Smiles bring down barriers, open doors and make you someone your audience just may want to have over for dinner.

Of course, smiling isn’t the only way to effectively use gestures. In general, for news and talking head television, the more movement you can give the picture the better. There’s nothing more uncomfortable than watching someone on television who is clearly uncomfortable. If you don’t want the “deer in the headlights” look, you must make facial expressions and use hand and head gestures. Different speaking and television formats call for different levels of usage, but dramatizing your facial gestures by about 25% is a general rule to follow. Using your hands as you talk will give your upper body and head movement. They can also help you draw in your audience and drive home your points. However, this is one area where you can have too much of a good thing. Overusing your hands can distract from your message.

Finally, your appearance matters. It may seem superficial, but it is also a fact of life that some colors, some clothes and all people wearing make-up (women and men) look better on television. Some general guidelines for presenting a credible and appealing appearance: When it comes to colors, it’s not so much which ones to wear as which ones not to wear. Stay away from orange, green, white and pastels in general. When it comes to suits, navy and gray are good basics. Women can brighten them up with colored blouses underneath and men can do the same with shirts and ties. It’s better to over-dress than under-dress. When in doubt, wear a suit, put on a tie. Solids are better than patterns, and this includes ties and scarves. Avoid wearing items that can be distracting to the viewer. When it comes to jewelry, less is usually more. Tie and lapel pins, which are usually too small for the viewer to be able to recognize and often reflect the studio lights causing a glare, should be removed before an interview or speech.

When it comes to make-up, sometimes it will be provided, sometimes it will not. You always want to wear it one way or the other, so be prepared to do it yourself. Because studio lights tend to wash people out, you want to use a foundation that is slightly darker than your natural skin tone. For those who don’t want to use liquid foundation, a bronzing powder will also do the trick. The main problem you want to avoid is shine from perspiration. Try out a couple of products in advance to see which ones work best for you.

Staying on Message

The best messages in the world are doomed to irrelevancy if you don’t get to say them and say them often. That’s why you want to have no more than three points at the most for each interview. To help you stay on message, use transition phrases. Here are a few examples: “That’s an interesting question John, but my constituents are more concerned about…” or “The real issue here is…” or “What’s relevant to this debate is…” You get the idea. The goal is not to avoid the question, the goal is to stick to your message and say what you came to say.

For a very few, like the Great Communicator President Ronald Reagan, the ability to inspire and motivate people seems to come naturally. But for those of us not born with the “gift,” Al Gore should be an inspiration. While we might not like Mr. Gore’s loose use of the facts, we have to give him credit for showing us the effectiveness of personalizing an issue and proving that just about anyone, including Wooden Al, can be a great communicator if they incorporate the right techniques.

Ms. Wood is Vice President of Communications at the Family Research Council.

WITH ROLLING BLACKOUTS, nose-diving credit ratings, bankrupt utilities, a huge state budget hole, and a likely economic recession, California’s electricity crisis has turned into a full-blown debacle. Although many elected officials have blamed this mess on deregulation, the real culprit has been and continues to be government intervention into the energy marketplace.

In 1996, California deregulated the wholesale price of electricity (the price utilities paid to purchase electricity), but capped the retail price that the utilities could charge consumers. Nobel Prize-winning UC-Berkeley economist Daniel McFadden observes that the electricity crisis was caused by “rigid regulation of retail prices in the face of rapid increases in wholesale prices.” Wholesale prices increased for several reasons.

First, in 2000, natural gas prices rose fourfold. Since California gets 34 percent of its electricity from natural gas-fired plants, nearly double the national average, the state is vulnerable to gas price swings. Higher natural gas prices increased the cost of gas-produced electricity from 3 cents per kilowatt hour in spring 2000 to 43 cents in February 2001.

Drought in the Pacific Northwest lowered hydroelectric production and reduced electricity exports to California. Also, last year, the state failed to promulgate guidelines to allow the utilities to enter into stable long-term purchase contracts.

Together, natural gas and hydroelectric power account for 75 percent of California’s in-state-produced electricity. The rest of the country relies on natural gas and hydroelectric for just 29 percent of its electricity needs. And whereas California gets none of its in-state-produced electricity from coal, which is cheap, plentiful and clean burning thanks to modern technology, and 15 percent from nuclear, the rest of the U.S. gets 61 percent of its electricity from coal and nuclear.

Add also a huge increase in California’s electricity demand (a 24 percent consumption increase over the last five years) and the failure to build any new major power plants in the last ten due to government and legal red tape. Consequently, California relies on older power plants that have to be taken off line and repaired more often, reducing supply.

High wholesale costs and government-controlled retail prices resulted in the utilities piling up a debt of $14 billion. Lifting the retail price caps would have saved the utilities, reduced demand, and prevented generators from raising wholesale prices above market rates since they would have feared reduced sales.

In February, Governor Davis acknowledged that “if I wanted to raise rates I could have solved this problem in 20 minutes.” Yet, the state was extremely slow to confront the crisis, and is buying electricity at $70 million a day, with the utilities just distributing it. California has also entered into long-term purchase contracts at prices estimated to be 40 to 60 percent above what the market price will be in three years.

For revenue, in May the legislature approved a $13.4 billion bond scheme that will supposedly pay both for past state electricity purchases and future purchases into 2003. This bond band-aid, though, makes several dubious assumptions. For instance, the plan is based on the assumption that summer spot market prices will be lower than current prices. However, the futures market for electricity indicates that wholesale power prices will jump 50 percent by midsummer. Also, the governor assumes that he will sign 50 contracts designed to produce half of the peak-time electricity that the state needs during the summer. However, only 28 such contracts have been signed, which likely means that the state will have to purchase significant amounts of its summer peak electricity on the expensive spot market.

If these assumptions are wrong, the state could spend $5 billion a month by midsummer, and his bond scheme, the largest in state history, would be used up in a few weeks. Democrat State Controller Kathleen Connell has accused the governor of tailoring his assumptions and figures to fit his goal of persuading the public and the financial sector that the crisis is nearly over when reality shows that the worse could be yet to come.

Davis advocates federal controls on wholesale costs, but James Hoecker, the former chair of the Federal Energy Regulatory Commission, notes that wholesale caps drive companies out of the market, sending their electricity to states without caps.

The governor wants the state to buy the utilities’ transmission lines, but state ownership doesn’t increase electricity supply nor decrease demand. He wants drastically increased conservation, but hasn’t said how this could be realistically accomplished.

Although his administration has approved building more power plants, less than 40 percent of the promised 5,000 new megawatts of power will come on line by the July 1st target.

In April, Davis finally dropped his opposition to a retail rate increase and proposed an average increase of 26.5 percent. Standard and Poors, though, indicated that this proposal wouldn’t pay for all electricity costs. Not coincidentally, PG&E immediately declared bankruptcy. In May, the state Public Utilities Commission approved a complicated rate increase scheme that still contains various rate caps and which still fails to link retail prices to wholesale prices in any systematic way.

California should look at other states and nations that have created better energy deregulation models. According to a recent study by Dr. Lynne Kiesling of the Reason Public Policy Institute, Pennsylvania’s retail price cap is more flexible than the initial cap enacted by California, and has resulted in greater competition in the electricity market. Pennsylvania consumers have benefited by receiving better service, more pricing and billing options, and lower retail prices. Countries like the United Kingdom (where rates have decreased 26 percent over the last nine years), Chile and Australia, which have adhered better to free-market principles, have also had much better success in deregulating their markets than California.

The lessons to be learned from California’s failed performance and the successes of other states and nations are clear and should point the way to real market-oriented reforms. For example, real-time pricing, where consumers pay the market rate for electricity at the time they use power, should be instituted. High prices at peak hours would reduce demand at those hours when blackouts are most possible. The poor could be given transitional assistance. Also, market-driven incentives for upgrading the state’s inadequate transmission system should be enacted. Finally, the governor should use his emergency powers, which are broad, to site and hasten construction of power plants. Such an energy program would get supply and demand back into balance and prevent the economic catastrophe lurking just around the corner.

Mr. Izumi is Senior Fellow in California Studies at the Pacific Research Institute for Public Policy.

On January 25-26, 2001, The Link Institute, a non-profit organization dedicated to promoting content and character in the classroom, convened a group of scholars to discuss a path-breaking article by Dartmouth College Professor James Bernard Murphy, entitled “Good Students, Good Persons.” Asking the question: “what is education?” and looking at current directions in both intellectual and moral education, Professor Murphy made the case for the cultivation of intellectual virtue as both the intellectual and moral aim of schooling. Two days of discussions yielded the “Portsmouth Declaration.”

“If we do not turn the hearts of children toward knowledge and character, we will lose their gifts and undermine their idealism.” —George W. Bush, January 20, 2001

AMERICAN SCHOOLS HAVE lost their way. In the past thirty years our schools have been asked, and at times compelled by state mandates, to pursue a wide range of non-academic activities and a broad spectrum of ideological agendas. Whether teaching about safe sex or multiculturalism, teen parenting or diverse lifestyles, the numerous extraneous demands placed on our nation’s schools have taken them off course.

It is time to recall that the primary purpose of schooling is the cultivation of good students, and in and through that process, the development of good persons. We, call upon parents, teachers, administrators, and policy makers to recognize that while some schools must alleviate the physical hunger of the children they serve, all schools must alleviate the intellectual hunger of students entrusted to their care. While some schools require security systems and teams of counselors, all schools must create an ethos of civility that promotes security and fosters learning.

The American Founders considered the twin goals of education to be “the diffusion of knowledge” and “the cultivation of virtue.” In the past fifteen years we have, fortunately, seen the rise of parallel education reform movements. One emphasizes rich “content” or knowledge in the curriculum, and another emphasizes character education, or the promotion of virtue. As educators and scholars who have supported both those goals, we recognize that now the two must be as one – inseparable and indivisible.

For the successful acquisition of knowledge and skills cannot be divorced from character. Motivation, a disposition of character, is essential. A good student does not simply master certain bodies of knowledge and employ critical thinking skills. They hunger to know and seek the truth in those pursuits. The good student strives not for easy answers, but for genuine understanding, persevering in the face of obstacles. The good student wishes not just to “get it done,” but to “get it right;” not simply to “get ahead,” but to “get the most out of it.”

We therefore call upon all educators to place new focus on the intellectual virtues, those traits that motivate our students to care about their work and do it well. While teaching a rigorous academic program, all educators should teach children to love the truth, and therefore to be diligent and honest in their work; to be accurate, precise, and thorough in their presentation; to persevere in difficult tasks; to consider both sides of an issue; to be fair to opposing views; to be intellectually courageous in pursuit of truth; and to be humble about assessing what they know in the face of the vast amount they do not know.

We call on those in the field of character education to direct more thought and energy toward an understanding of intellectual virtue, and an understanding of which moral virtues most directly support the intellectual virtues. For the intellectual virtues are a subset of the moral virtues. Philosophers have begun this task and historian Diane Ravitch reminds us that “schools cannot be successful unless they teach children the importance of honesty, personal responsibility, intellectual curiosity, industry, kindness, empathy and courage.” Those virtues contribute directly to quality academic work, and to an ethos of civility much needed in our schools.

If we reclaim for our nation’s schools the goal of intellectual virtue – which is fundamentally about truth-seeking – we will reap the following rewards:

● In the teaching of American history we will reclaim an honest and inclusive telling of our past. We will repudiate “presentism,” and discredit the dishonest and destructive “Hate-Our-History” movement.

● In the teaching of literature we will help students recognize literary quality: accurate language, felicitous imagery, delightful cadence, rhythm, and wit. We will not debase literature by redefining it as a tool for gender, racial, ethnic or social activism.

● In the teaching of math we will restore concern for mathematics as a discipline, for its rigor, precision, accuracy, logic, and universality. We will not be misled by those who believe calculators, guess-work, reflective essays, and unique “cognitive styles” should be emphasized over content, practice, and mastery of fundamentals.

● In the teaching of science we will restore a concern for the importance of systematic inquiry grounded in a solid knowledge base and premised on accurate and careful observational skills. We will reject a postmodernist view of science that questions the objectivity of observations and the truth of scientific knowledge.

With a strong national commitment to cultivating intellectual and moral virtue, we can look forward to the day when U. S. test scores will rise to the summit of industrialized nations rather than languishing at the bottom. We can hope for the day when metal detectors at the school door will be unnecessary. We can anticipate a time when foul language will be replaced by civil discourse, and when earnest self-discipline will replace baseless self-esteem.

If we pursue the intellectual virtues, we will advance an initiative that unites the twin concerns of content and character in the classroom. For to be a good student, one who is conscientious in pursuit of the truth and diligent in its acquisition, is in large measure to be a good person. And being a good person, one who is respectful of his peers, responsible in his actions, helpful to others, and committed to the community of which he is a part, is in large measure what it takes to be a good student.

WHEN THE BERLIN WALL COLLAPSED, one would have expected Marxist ideology of class warfare to disappear along with it. But this year’s tax debate has shown the politics-of-envy is alive and well. Demagogues are vilifying President Bush’s plan to lower tax rates and repeal the death tax as a “massive giveaway to the rich.”

We should ignore this false rhetoric. Letting people keep more of the money they earn is not a “giveaway,” it’s a smart strategy to boost our economy. The last thing we should do is mimic Europe’s welfare states, which have been economically crippled for years by wealth-redistribution policies. The United States is prosperous in large part because it avoids class warfare.

Most Americans still regard success as something to be admired – and sought after – rather than as something to be envied. But to allow all Americans to reach for success, we must remove the barriers to upward mobility that clutter our tax code.

This is why across-the-board tax cuts are such a good idea. Not to help the rich, but to help others become rich – or at least to rise as far and as fast as their talent, ability and willingness to work hard will take them. But the debate over tax “fairness” isn’t just an ideological battle between those who support a free-market economy and those who desire a welfare state. It’s a factual battle, based on numbers that can be easily checked. And it turns out that many of the claims made by tax-cut opponents wither under scrutiny.

For instance:

MYTH #1: The rich don’t pay their fair share and shouldn’t get a tax cut.

REALITY: According to the IRS, the top 1 percent of income earners pay more than one-third of the total income tax burden. The top 10 percent pay more than two-thirds. And the bottom 50 percent of
income earners? They pay barely 4 percent of income taxes. That’s why it’s virtually impossible to cut taxes without letting the “rich” benefit.

MYTH #2: Lower tax rates mean the rich will pay less.

REALITY: History shows otherwise. The rich paid more after tax rates were cut in the 1920s, and they also paid more after the Kennedy rate cuts in the 1960s. More recently, President Reagan slashed tax rates in the 1980s. What happened? The top 1 percent went from shouldering 18 percent of the income tax burden in 1981 to paying 28 percent in 1988. The top 10 percent saw their share of the burden climb from 48 percent in 1981 to more than 57 percent in 1988.

MYTH #3: Reducing tax rates doesn’t help the poor.

REALITY: It’s true the poor don’t receive a tax cut when tax rates are reduced, but that’s because they don’t pay income taxes to begin with. Yet this doesn’t mean they receive no benefits. Indeed, because they are on the lowest rungs of the economic ladder, they will be the biggest beneficiaries of faster growth, taking advantage of the new job openings and higher wages.

MYTH #4: With lower tax rates, the rich get richer while the poor get poorer.

REALITY: The class-warfare crowd should remember the words of President Kennedy: A rising tide lifts all boats. Census Bureau data show that earnings for all income classes tend to rise and fall in unison. In other words, economic policy either generates positive results, in which case all income classes benefit, or it causes stagnation and decline, in which case all groups suffer.

MYTH #5: Those who work hard and play by the rules cannot climb the economic ladder.

REALITY: America remains a land of opportunity. Even President Clinton’s Council of Economic Advisers reported that “almost two-thirds of households change income quintiles over 10 years.” A Treasury Department study of tax returns found that, over a 10-year period, the poorest 20 percent were more likely to have climbed to the top 20 percent than to have remained in the bottom 20 percent.

In short, Americans can and do climb the ladder of opportunity – and lower tax rates can help them climb higher and faster.

When politicians pit one income group against another, the only winners are those who believe more power should be concentrated in Washington, D.C. The economic evidence clearly demonstrates that the economy does better when tax rates are lower. Yes, tax cuts would benefit some upper-income taxpayers. But the real winners are typical Americans – rich and poor – who want greater opportunities for themselves and their children.

Dr. Mitchell is the McKenna Senior Fellow in Political Economy at The Heritage Foundation.

THE NUMBER OF AMERICANS WHO GO without health insurance at some point during the year—some 42 million, by most estimates—could rise dramatically in the coming decade unless lawmakers administer some serious medicine to our ailing health-care system.

States too often bear the brunt of this problem that is mostly the result of inaction at the federal level. The strategies outlined below show ways for Congress to increase access to health insurance. State efforts can complement, or in some cases even precede, congressional action by offering tax credits for the uninsured and eliminating costly and burdensome mandates on insurers. These actions would make coverage more affordable for people in need. But states must look to the Congress to change federal laws so that all Americans can have greater access to health insurance.

Policymakers must begin to think “outside the box” and look for solutions beyond the employment-based health insurance system that is a relic of the World War II era. The current system provides tax benefits for those who purchase insurance through their employers but no incentives for people who do not have access to employment-based plans. Without reform, the uninsurance trend will continue to rise in today’s dynamic information-driven economy that puts a premium on mobility. But it will accelerate even faster if the economy enters a recession or if Congress passes so-called patients’ rights legislation and imposes a new level of detailed regulation and mandates on the market, raising costs and expanding liability for employers.

Congress and the Bush Administration must work together to ensure equity in the tax code for those who do not have access to employer-based coverage. Providing the resources alone, however, will not be enough. Congress must also pave the regulatory way to empower individuals, families, and groups other than employers to make their own health care decisions and purchase insurance to fit their needs. These 10 steps offer policymakers ways to make sound improvements in the current system that will greatly expand accessibility, coverage, and choice. Specifically, they should:

1. Provide tax credits for the purchase of health insurance. The most recent research, conducted by Mark Pauly and Bradley Herring of the University of Pennsylvania’s Wharton School of Business, indicates that a tax credit equal to 50 percent of premiums would reduce the number of uninsured by half. The tax credits should be fully refundable, pre-payable, and made available to all Americans.

2. Clarify the liability of employers who offer defined contributions. Employers have moved from offering defined benefits to providing defined contributions in retirement accounts, and many would like to do the same with health benefits. Congress should make plain in statute that by giving their employees control of the plans in this way, employers would be free from fiduciary responsibility.

3. Allow employees to make tax-free contributions to their health plan. Congressional staffs now enjoy this perquisite. Surely, private-sector workers should enjoy the same benefit.

4. End the caps on medical savings accounts (MSAs). Congress should lift the restrictions on MSAs so that individuals can participate regardless of employment status or size of employer.

5. Permit the formation of association health plans (AHPs). Allowing owners of small businesses to band together across state lines to increase their purchasing power or to self-insure and spread the risks would enable them to offer or improve health plans for their workers.

6. Allow individual membership associations (IMAs) to offer health insurance. Like AHPs, IMAs could leverage the buying power of members of fraternal, religious, or professional associations. Because people tend to be members of such groups much longer than they tend to work for one employer, members of IMAs could enjoy continuity of coverage regardless of job mobility.

7. Allow health care consumers to choose between plans covered by federal or state regulations. Congress should amend the Employee Retirement Income Security Act of 1974 (ERISA) so that a plan purchased with an employer’s defined contribution need not be considered a group plan as is now the case. A group plan brings with it certain federal regulations, whereas individual plans are regulated by the state. If employees could choose the regulatory framework behind their plans, they are more likely to be satisfied.

8. Encourage responsible buying of insurance. Congress should eliminate the “guaranteed issue” provision in current law, which mandates that insurance companies and HMOs selling in the small group market must sell insurance to any employer regardless of the employer’s claims history or employee health. This encourages employers to buy coverage only when employees need it, which is similar to purchasing homeowners’ insurance after the house burns down.

9. Consider creating a new federal charter for health insurance. The current morass of federal and state regulation is confusing and often duplicative. Congress should examine the feasibility of creating a new federal charter for health insurers and consumers. Consumers could participate in this new option or in their state-regulated systems, much as people today can choose to save in a federal- or state-regulated bank.

10. Promote a national high-risk pool for the highest-cost, most vulnerable people—the “uninsurables.” A national high-risk pool should be part of the federal charter so that people who are turned down by an insurer can still obtain coverage. Although “uninsurables” represent as little as 1 percent of the population, their needs are the greatest and must be accommodated.

By focusing on strategies such as these, the Bush Administration and Congress can reverse the growing numbers of Americans without health insurance and make today’s health insurance system reflect the needs of families in today’s rapidly changing economy.